Indiana Legislators Move to Delay Foreclosure Filings

According to WIBC Indiana's legislature has approved legislation that would delay the foreclosure process and help home-owners negotiate new mortgage terms to get caught up.

House Approves Bill That Would Delay Foreclosures
By Eric Berman
2/25/2009

The Indiana House has overwhelmingly approved an attempt to stem the tide of foreclosures.

Lenders would have to delay filing foreclosure actions for a month to try to negotiate new mortgage terms with homeowners on the edge.

House Financial Institutions Chairman Jeb Bardon (D-Indianapolis) says the bill still needs work, in part because the state must wait to see what changes the Obama Administration makes in federal bankruptcy law. One proposal under consideration would let bankruptcy judges force lenders to accept lower interest rates on mortgages.

Bardon's bill formalizes the state-sponsored loan counseling service established to help homeowners avoid toppling into foreclosure.

Stop Foreclosure--Show the Note

One strategy that borrowers can do to delay or stop foreclosure is to go to court and ask the lender to "Produce the note" or "Show the note"



The borrower needs to request the lender to "produce the note" in order to have the lending institution prove that they own the debt. There have been cases of homeowners getting foreclosed on by 2 different mortgage companies--each thinking that they have the first lien on the property.

This isn't a way to stay in your house for free, but can work as a bargaining chip to negotiate a workable payment plan with the mortgage company and stop your foreclosure.

Stop Foreclosure--Consider a Short Sale

If you have fallen behind in your mortgage payments and the bank has started the foreclosure process---do something about it.

One option to consider is asking the bank about possibility of a Short Sale on your home.

Suppose that you purchased a $320,000 house in 2007 and got a $280,000 mortgage on the property. There's a chance that real-estate prices in some areas (California, Florida, Nevada, Arizona) have dropped by more than 25%---That means your house is now worth only $240,000. Even if you have made a years worth of mortgage payments, you still owe ~$280,000 on your house that is only worth $240,000!

Call up the bank, ask to speak to the loss mitigation department (This works best if you're a few months behind in your mortgage payments), explain to the loss mitigation department your financial difficulties, and ask to get their OK to pursue a short-sale. This means that the bank will let you find a buyer in the marketplace who will buy the house for a value less than the outstanding mortgage balance. (Say $225,000 in our example).

This means, (1) you don't get foreclosed on (2) The bank doesn't want to own properties--they want to own loans that are paying off---The bank is better off b/c they never take possession of the property (3) The new home buyer is happy b/c they get a home at a fair price.

Call up your bank---Ask for a Short Sale

Welcome to Stop Foreclosure

This blog is meant to offer you tips and advice on things to consider for stopping or delaying foreclosure. I am not an attorney, nor do I claim to be an attorney. If you are going through the foreclosure process, it is best that you get legal representation and speak with an attorney.

The most straight forward way to stop foreclosure is to pay-off your mortgage, but more than likely, you don't have a rich uncle to help you out, and there's a good chance that your mortgage is underwater---meaning that you owe more on your house than what you could sell it for.

If that's the case, there's a few options you should consider--to delay or stop the foreclosure process.